Marin County computer debacle: 'Public deserves some answers'

High-tech experts who had been following the county of Marin's legal battle over a $30 million computer problem were left wondering what happened, after county officials — who spent $5 million in legal fees — announced a $3.9 million settlement last week with no public explanation.

Dropped in the deal crafted behind closed doors were all claims against Deloitte Consulting LLP, software giant SAP and former county auditor Ernest Culver, who managed the computer project for the county before quitting to join SAP in 2007.

The county board, claiming fraud, racketeering, bribery and other wrongdoing, filed two high-profile lawsuits in 2010, saying the county was ripped off when a sophisticated fiscal accounting system failed to work right. Officials later decided to scrap the inefficient system that a grand jury calculated had cost taxpayers $28.6 million by 2009. It remains "stable" and in use while officials determine what system to buy next.

Although officials contended for more than a year their case was strong despite setbacks in court, the county bailed out last week and officials declined comment, with elected leaders citing a settlement gag order.

The settlement statement was hammered out "word for word" in a series of closed meetings last year, when the county Board of Supervisors held at least 11 private sessions on the lawsuit situation.

"Given the terms of the settlement, we can't provide any comments beyond what is included in the settlement," said Supervisor Judy Arnold, board president. "Our board relied on county counsel to give us guidance to achieve the best settlement we can, given the past rulings of the judge. We are not happy, but we need to move forward."

Several observers indicated the public's right to know what is going on took a beating while county supervisors ducked public accountability, although one suggested the gag order may have been demanded by Deloitte before it agreed to any cash settlement.

"Given the level of cost and effort Marin expended on the suit, the settlement amount is surprisingly low," said Michael Krigsman, CEO of Asuret, a Boston consultancy focused on enterprise strategy and reducing technology implementation failures. "Obviously, there is more here than meets the eye."

Krigsman, who has followed the Marin case from the start, said it came as no surprise that Deloitte wanted to settle the county's suit in order to minimize damage to the company's reputation. But "given the county's bravado when it filed suit, this settlement seems like meager pickings for the county," he added.

Deloitte "has a history of implementation failures and lawsuits," Krigsman noted, with cases involving the Los Angeles Unified School District, city of San Antonio and Miami-Dade School District, among others. "This pattern could obviously create substantial negative publicity for Deloitte, which explains why the settlement reveals so few details," he added.

But in light of the complexity of the case and the costs involved, "it is unfortunate that the parties have hidden details from public view," he said. "It seems the entire situation results from poor judgment and errors from both Marin and Deloitte. ... There is little clarity except apparent attempts to sweep everything away as if it never happened."

Phil Paisley of Ross, CEO of Interbill, a software company, said he was not surprised the county wound up with the short end of the stick.

"When the lawsuit was filed I called Hal Brown's office and said, 'This is insane,'" Paisley said. "Nobody wins this one. No way Jose is this going to fly."

Computer systems fail because of "lack of internal management," and the county shares blame for what happened when the complicated, customized system it ordered failed to perform and poorly trained employees were unable to cope, Paisley said. "One of the problems is that accountability is nowhere to be seen," Paisley added. "The Board of Supervisors is not accountable, saying, 'Sorry, we'd love to tell you but we have this gag order.' Talk about self-serving.

"It's too bad we don't know more about what really happened," Paisley concluded. "This is the public's money and the public deserves some answers."

Ben Dresden, who served as county high-tech chief for 19 years and was an early critic of plans for the fancy system but retired before it was launched, called the saga "a real tragedy" in which public officials were misled, "spent $30 million on a system one could argue wasn't necessary in the first place," hired consultants instead of using existing staff and "then to exonerate their mistakes, decided to sue." The buck stops at the county board, Dresden noted, where supervisors "have to accept responsibility" for an expensive mess.

Peter Scheer, CEO of the First Amendment Coalition, a San Rafael-based organization that promotes the public's right to know, said an angle hinted at but not confirmed by tight-lipped officials should be considered.

If county supervisors are using the gag order to seek political cover and avoid accountability, "the public is not well served by their reticence," Scheer said. But it's a different story if the board agreed to a gag order as the only way to get Deloitte to pay $3.9 million — rather than a lesser amount, he said. "We just don't know."

Others aren't as charitable about the county board's motivations.

The county's wayward lawsuits "cost us millions of dollars and should never have been brought, to cover a case pertaining to a computer system that cost us $30 million and that never should have been purchased," fumed Jody Morales, founder of Marin's Citizens for Sustainable Pension Plans, in an email.

"The crowning insult: a signed agreement, behind closed doors that shields them from public scrutiny."